Fixed Deposit is the safer investment option in comparison to other investment schemes. A fixed deposit account is your investment account where you can keep your money and earn interest on the duration of the deposit. It is among the most popular choices of investment in India as it offers low risk and higher interest (as compared to savings account) on your deposited money. However, fixed interest rate is paid at the end of maturity period and it varies from bank to bank. Usually longer deposit period yields higher interest rate on a fixed deposit account.
Benefits of a fixed deposit account:
- You get guaranteed returns of your deposited money as your investment does not depend upon fluctuating market rates unlike other investment schemes such as mutual funds, stocks, etc.
- Investing your money into a fixed deposit gives you more benefits than depositing money in a savings account.
- The fixed deposit account helps you in cases of financial urgency. In such cases, some banks also offer you loan against your fixed deposit account. Investor can get a loan of up to 90% of your fixed deposit amount.
- Interest is paid upon maturity annually or monthly depending on the term you opt for.
- You can secure your future by saving money into fixed deposit and earning reasonable interest on it.
- Fixed deposits come with flexible tenure and you can choose the tenure of your investment ranging from 10 days to 10 years.
Fixed Deposit Calculator
Fixed Deposit Calculator is an online tool which helps the depositor in calculating the returns and interest earned on a Fixed Deposit account upon maturity. It is a virtual calculator where the depositor can input their basic FD account details such as FD tenure, deposited amount, rate of interest to calculate the returns from their Fixed Deposit.
How Fixed Deposit Calculator works
The FD Calculator is a very user friendly tool as it eliminates the need of manual calculations. Computer tools such as spreadsheets also fail to provide the ease and convenience offered by a fixed deposit calculator. User has to input the amount which they have invested into their fixed deposit account, tenure of the deposit and rate of interest offered on their FD.
Once all the details have been entered, then the user can click ‘calculate’ in order to get the instant and accurate maturity amount.
- FD calculator can help you in comparing the returns of various banks. Before investing into any Fixed Deposit, you can do a survey about which bank offers highest returns.
- Accurate and quick calculations help the user to plan their investments beforehand. FD calculator helps the most in case of deposit renewals as the interest rate offered is fixed but they can differ upon maturity.
- New interest rates which are offered at the end the term can be higher or lower depending upon the particular bank. FD calculator can be used to calculate this interest rate. It helps the depositor to decide whether he/she should continue with the same fixed deposit scheme or switch to another by comparing their respective returns upon maturity.
- Manual calculations are more prone to errors and it gets more complicated when it you have to compare between various schemes.
How the interest is calculated
Compound interest is offered on Fixed Deposit and it can be calculated as:
A = P (1 + r/n) (nt)
A= Total returns earned upon maturity of the Fixed Deposit
P= Principal deposited amount
r= Annual interest rate
n= Number of times when interest is compounded every year
t= tenure of your Fixed deposit